Sony Group Corp. has taken steps to re-enter the U.S. investment-grade bond market for the first time since 1998, mandating Bank of America Corp. and Morgan Stanley to organize investor calls that began on Monday for a planned dollar-denominated debt offering.
The company intends to sell two tranches of notes with maturities of five and 10 years, according to a Bloomberg news report. In a filing with the U.S. Securities and Exchange Commission, Sony said the net proceeds from the intended sale would be used for general corporate purposes.
Sony's last direct issuance of U.S. dollar bonds occurred in 1998, when the company raised $1.5 billion. Bloomberg data also note that a former U.S. unit of the Tokyo-based firm accessed the U.S. bond market in 2001.
The planned transaction comes at a time when a broad set of high-grade issuers are accelerating supply in the U.S. market to capture tight credit spreads. That wave of issuance is occurring against a backdrop of growing market expectations that the Federal Reserve may soon resume raising interest rates, which is motivating companies to secure financing before potential upward moves in borrowing costs.
For Japanese issuers in particular, dollar-denominated debt has become more compelling after the Bank of Japan's policy tightening pushed its benchmark interest rate to the highest level since 1995. That change in domestic policy has shifted the relative appeal of foreign-currency funding and coincides with record issuance of euro-denominated notes by Japanese firms as they pursue funding diversification amid narrowing rate differentials.
Sony's decision to tap U.S. dollar markets via five- and 10-year tranches, and to use the proceeds for general corporate purposes as disclosed in its SEC filing, reflects the current market dynamic in which borrowers weigh cross-currency funding opportunities and the timing of rate moves by major central banks.
Clear summary:
- Sony has hired Bank of America and Morgan Stanley to run investor calls for a planned U.S. dollar bond sale, marking its first direct return to the U.S. investment-grade market since 1998.
- The offering is expected to include five- and 10-year tranches; proceeds will fund general corporate purposes, per Sony's SEC filing and market reports.
- The deal arrives as issuers push to lock in tight credit spreads and amid shifting attractiveness of dollar-denominated borrowing for Japanese companies following Bank of Japan policy changes.